Government Predicts Rise in Inflation in FY 2025–26 Budget Outlook

Islamabad:The federal government has expressed concerns about a possible **increase in inflation** during the upcoming fiscal year **2025–26**, with the **average inflation rate (CPI-based)** projected at **7.5%**, compared to the **current year’s estimated 5%**.

According to an official outlook from the **Ministry of Planning**, the rise in inflation is expected due to multiple economic pressures, including:

* **Relaxation of import restrictions**
* **Increased debt repayments**
* **Potential widening of the current account deficit**

### External Sector Pressures Expected

The government warns that these factors could place **strain on the external sector**, leading to **instability in trade and currency markets** during the new fiscal year.

### Economic Framework to Be Finalized

The **Annual Plan Coordination Committee (APCC)** meeting is scheduled for **Monday, June 2, 2025**, where the **macroeconomic framework for the FY 2025–26 budget** will be reviewed and finalized.

Key targets include:

* **GDP Growth Projection:** **4.2%** for FY 2025–26
*(Compared to 2.68% growth in the current fiscal year)*

The Planning Ministry’s projections indicate optimism for improved economic growth but underline **serious risks from inflation and external account imbalances**, urging careful fiscal and monetary management in the new budget.